Netherlands

In 2017, the Dutch government plans to increase defence spending by 300 million Euros, as was officially announced at the opening of the Dutch parliament, on 20 September. The Ministry of Defence will have almost 8.7 billion Euros available in support of its efforts. The bulk amount of these funds will be allocated to the stockpiling of spare parts and ammunition and to the recruitment of extra personnel. In 2016, the defence budget was also increased, in that case by 220 million Euros. This amount of money was used in part to further improve the armed forces’ operational deployability. Additionally, extra funding was made available on a structural basis, for Dutch participation in peace keeping missions.

The Netherlands, as one of the biggest economies in Europe, historically exhibits high trade surpluses, stable industrial relations, and moderate unemployment. Additionally, the Dutch workforce is highly skilled, flexible and multilingual, while a large proportion of the country’s population, falls within the economically ‘active’ age range (i.e. 15-64 years).

In 2007, the Dutch economy reached a historical high, but economic growth fell sharply in 2008, as the local economy was hit hard by the global economic crisis. This trend continued in 2009. To address this economic downturn, the government sought to stimulate the domestic economy, by accelerating infrastructure investment programmes. The related stimulus programmes and bank bailouts, resulted in a government budget deficit of 5.3% of the GDP, in 2010. The year 2014, saw a slight Gross Domestic Product (GDP) growth of 0.8% and a rise in most economic indicators. According to official estimates provided by the Statistics Netherlands (CBS), in the second quarter of 2016, the Dutch economy grew by 0.6% compared to the first quarter of the same year. The growth should be mainly attributed to the fact that real wage gains supported higher private consumption, while the improved business outlook and the ongoing recovery of the housing market, supported investment.

The significant positive trade balance the country recorded for the whole of 2016, was one of the reasons why its economy performed well. Historically, the Netherlands’ economy is open to global trade and investment, something that is reinforced with a transparent and competitive regulatory framework. According to CBS reports the total volume of exported goods in 2016, grew by about 1.2 percent when compared with the previous year. In 2016, the Netherlands exported goods with a total value of some 432.34 billion Euros, while imported goods totalling about 380.57 billion, creating a trade surplus of around 51.77 billion. The European Union (EU) is the biggest trade partner for the Netherlands, as approximately 72% (i.e. 311.29 billion Euros) of Dutch exports remained within the EU, while more than half (53.7%) of the country’s imported goods (204.48 billion Euros) originated from the EU.

Another important pillar of the Dutch economy, is Foreign Direct Investment. The Netherlands offer an attractive business and investment climate that has been appreciated by some 6300 foreign companies that have already established over 8110 operations in the Netherlands. Among them are companies such as Abbott Laboratories, Boeing, Bombardier, Cisco Systems, Dow, Eastman Chemical, Heinz, Medtronic, NCR Corporation, Reebok, Bosch, Danone, Siemens, Astellas, BenQ, Daewoo, Fujifilm, Giant, Hitachi, Huawei, ICBC, LG Electronics, SABIC, Samsung, Saudi Aramco, Tata Consultancy Services and Teijin. The openness of the Dutch business environment is also highlighted in several related international indicators. In the World Bank’s “Doing Business 2017” report, the BENELUX country ranked 28th out of 190 countries, 15th out of 180 countries in the 2017 Heritage Foundation’s “Index of Economic Freedom” and 9th out of 128, in the “Global Innovation Index 2016” report.

Additionally, the Netherlands have established a taxation system that has a number of attractive features, such as a corporate income tax rate of 20% on the first € 200,000, and 25% for taxable profits exceeding € 200,000, which is well below the EU national average. More on that direction, the BENELUX country has signed treaties with more than 80 countries that ensure the avoidance of double taxation on income and capital, while Dutch domestic restrictions on foreign investment are minimal.

Finally, it is worth noting that unemployment in the country continues to fall. In August 2016, 521,000 people were unemployed, in other words some 5.8% of the labour force, significantly decreased when compared to the February 2015 peak, of almost 8%.